Expectations about what Dyson was developing mounted after mainstream car makers accelerated their plans for electric vehicles.
Mini revealed its own all-electric vehicle ahead of this month's Frankfurt Motor Show. Meanwhile, Jaguar Land Rover and Aston Martin - among many - are preparing to launch their own new all-electric and hybrid cars.
Last year Aston Martin's product development director Ian Minards - responsible for creating many of James Bond's favourite cars - was recruited by Dyson. He was followed last month by Aston's long-serving director of purchasing David Wyer.
It is understood that a designer from Tesla has also been wooed to Dyson.
A car division would also signal a significant expansion of Dyson which, until now, has focused on consumer goods.
His cyclonic, bagless vacuum cleaner - took 15 years, 5,126 prototypes and his life savings to get on to the market, but it shook up the entire industry.
The Government, which says all cars must have an electric element by 2040 has also funded Dyson to develop a new battery electric vehicle at its headquarters.
This will secure £174 million (NZ$342m) of investment in the area creating over 500 jobs, mostly in engineering.
Meanwhile, Dyson has bought a solid-state battery company and been recruiting computer experts from Silicon Valley and experts in 'machine' learning - essential for the development of self-driving cars.
A final clue to Dyson's plans come from the fact that BMW's current global director of sales and marketing Dr Ian Robertson, who has overseen much of the German car-giant's electric and autonomous car programme, is also non-executive director of Dyson.
Dyson has been investing £2.5 billion into artificial intelligence research on a new 517-acre campus in Wiltshire, spending £58m on the specialist battery and opening two flagship shops - one in London and the other, New York.
He employs more than 8,000 staff (many at manufacturing plants in Asia since 2002) with plans to expand four-fold over the next five years. There are 3,000 on the Malmesbury campus, plus 33 undergraduates taking his new degree course.
A spokesman for Dyson would not discuss future products but said: "We have historically recruited from a wide range of backgrounds as we are a broad church and are developing a multitude of technologies. We plan to recruit an extra 3,000 engineers and scientists by 2020 and are working with more than 40 universities globally."
